Picture this scenario…
There’s a neighbor on your street who’s put his house up for sale.
It’s a big, gorgeous home, with a sparkling pool and meticulously landscaped front and back yards.
It’s also one that you would love to own if you had the opportunity, since you’re tired of being a renter. Every time you walk by it, you think to yourself, “What if…”
You’ve noticed there hasn’t been much activity on the property, and it’s been sitting vacant for six months now.
It’s currently listed for $500,000, but it’d be a steal if you could get your hands on it for $400,000.
Make Him an Offer He Can’t Refuse…
You tell him that you’re interested in buying the home, but not for his asking price of $500,000.
You say that you’ll buy the house for $400,000 at any time during the next six months if he needs to unload it in desperation.
But, to keep your promise to buy the house, the neighbor would have to pay you a fee of $5,000.
The neighbor, knowing that he hasn’t had any real looks at the property over the last six months, decides to take you up on your offer. He tells you that he doesn’t really want to sell it for $400,000, but it’s nice to know that you’ll be there to step in and buy it if necessary.
You enter the agreement to buy the house within the next six months under any condition for $400,000, and in return, you receive $5,000.
Well, six months go by and the house still hasn’t sold, even though the neighbor reduced the price to $450,000.
Your contract with the neighbor has now expired, and although the neighbor decided to keep the house on the market, at least you walked away with $5,000 in your pocket.
Hindsight being 20/20, your neighbor just gifted you that money without any strings attached.
Still, your neighbor approaches you again, asking if you wanted to enter into anothersix-month agreement for the same $5,000 fee to buy the house at $400,000.
Knowing you have nothing to lose, you once again enter into the agreement and collect your $5,000 upfront fee.
As the next six months go by, your neighbor not only gets divorced, but also has two kids’ college tuitions to pay for. He’s desperate for money and really needs to sell the house ASAP!
He comes to you and says, “Hey, let’s put this contract into action.” He’s now willing to sell you the house for $400,000.
You’re now the proud owner of a beautiful house for a well-under-market price. And the cherry on top? You also got an extra $10,000 just for making the deal.
Sounds like a pretty clever and lucrative way to navigate the real-estate market.
Unfortunately, it’s completely hypothetical, and as far as I know, deals like this don’t occur in the real world.
But, to our benefit, deals like this occur every single day in the stock market, and I’ve been telling you about them for the last four months.
The Next Best Thing
It’s called selling put options!
The options market is an incredible place to make money – if you know how to do it properly.
I’ve spent the last 27 years pulling income from the options market, not only as a floor trader, but as an “upstairs” trader working off the screens (online trading).
If I convince you of anything, it’s that options are incredibly versatile. You can create an almost endless array of combinations to take advantage of any market condition, for any directional assessment, and for any length of time.
Right now, here are a few stocks I have on my radar for potential put-sell trades.
- Microsoft (Nasdaq: MSFT)
- Glaxosmithkline (Nasdaq: GSK)
- Alcoa (Nasdaq: AA)
I’m keen on owning these stocks, but – and this is the important part – not at their current prices.
I’ve pinpointed a few put options that would be perfect to sell, and I’m getting ready to alert my Instant Income Alert readers about these opportunities.
So far this year, every recommendation I’ve made to my readers has been in the green, so don’t write off the strategy as too complicated or too esoteric.
I’m telling you, it’s not. My readers would tell you the same thing.
If you like a stock and like getting paid cash, someone will pay you for your obligation, just like the real-estate example.
It’s super easy!
Have you been thinking about the strategy? Are you on the fence? Do you want to know more?
Let me know your thoughts, questions or comments. I’m here ready to answer. We all are!